T-Hrvatski Telekom (Reuters: THTC.L, HT.ZA; Bloomberg: THTC LI, HTRA CZ), Croatia’s leading telecommunications provider, announces audited results for the year ended 31 December 2013.
In 2013, T-HT maintained its robust market leading position in the Croatian telecommunication market in all business segments. At the end of the year, T-HT had more than 1.2 million fixed line customers, 2.3 million mobile subscribers, 628,414 broadband retail access lines and provided TV services to 390,755 customers.
In 2013, T-HT delivered revenue of HRK 7.04 billion, down 6.8% on the previous year. T-HT’s revenue was strongly impacted by the economic downturn and significant regulatory changes resulting from harmonization with EU regulations during the year, particularly in the areas of roaming and termination prices.
T-HT slowed the decrease in its revenues, with a 2.9% increase in non-voice revenue and a significant 25.5% increase in ICT revenue. Revenue increases were also seen in mobile broadband and TV services.
T-HT also maintained a strong EBITDA margin of 42.6%, down 2.1 percentage points from the previous year. The EBITDA margin before exceptional items stands at 43.5%, a fall of 3.1 percentage points from 2012.
In 2013, net income was HRK 1.44 billion, down 15.0% on the previous year.
For 2013, the Group reported capital expenditure of HRK 1.43 billion, which marked a 20.8% increase on the previous year. T-HT continued to invest in IP transformation and mobile broadband infrastructure, including the LTE network for 4G services.
Intensifying investment in company development to reverse the trend
Although the revenue decrease was slowed by increases in ICT revenue and non-voice revenue, the decline in revenue from traditional services has continued and with it the fall in profitability.
T-HT intends to intensify its investments in the development of the Group by investing in infrastructure development and through the regional expansion of its business, to reverse the trend in declining business results and ensure long term value for its shareholders.
As a consequence, T-HT proposes the distribution of part of its net income in the amount of HRK 736,961,436 to shareholders through a dividend payment of HRK 9.00 per share. That equates to 51.5% of income allocated to shareholders. The remaining 48.5% in the amount of HRK 694 million is proposed to be allocated for reinvestment in the business and the share capital will be increased by this amount.
Intensified investment in infrastructure development and entry into the region will ensure long term value for shareholders, and create the opportunity for further growth and strong business results across the Group. Investment will be focused on infrastructure development and service quality improvements, exploitation of regional expansion opportunities and the further expansion of the business through offering products and services across the region.
Investment in infrastructure development and service quality will ensure the further strengthening of T-HT's position in growing market segments related to fixed and mobile broadband access, TV services and Cloud services as well as the development of an intuitive and highly developed customer experience in the selection, purchase and delivery of services.
Along with opportunities for regional business expansion through acquisitions, the Group is also considering the possibilities of the regional expansion of its services and products.
Davor Tomašković, President of the Management Board (CEO) said: "Our results for 2013 announced today demonstrate that T-HT has maintained its leading position across all segments of the Croatian telecommunication market. The economic downturn and significant regulatory changes strongly impacted the 2013 performance.
In order to reverse the declining trend in T-HT’s results and to ensure long-term value for shareholders, we plan to embark on significant investment in the development of the Group. We will intensify investment in infrastructure development and increased service quality while also identifying and exploiting regional business expansion opportunities. In order to strengthen our presence in the region, as well as potential acquisition opportunities we will also consider expanding our products and services in southeast European markets.
T-HT is also undertaking further internal transformation to achieve a more flexible organization that is wholly focused on our customers and on constantly improving our product and service offering. We aim to establish a longer-term perspective for T-HT, our shareholders and employees – and we will need to take significant steps to do so."